Keeping cash crucial for older Australians

The Albanese government has released the details of a plan to ensure Australians are able to pay for essentials with cash should they choose to.

Treasurer Jim Chalmers announced this week that the government will mandate the acceptance of cash for businesses that supply basic goods and services, such as groceries and fuel, with only small businesses to be granted an exemption.

Cash is an essential part of everyday life for many older Australians and those living in rural and remote areas, and can be a lifeline for people leaving domestic and family violence situations.

“Around 1.5 million Australians use cash to make more than 80 per cent of their in‑person payments. Cash also provides an easily accessible back‑up to digital payments in times of natural disaster or digital outage,“ Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones said in a joint statement.

“According to the most recent data, up to 94 per cent of businesses continue to accept cash, and we want to see cash acceptance continue particularly for essentials.“

The Department of Treasury said it will commence a consultation process before the end of the year, with finer details of the plan to be released in 2025, and will aim to introduce the mandate from January 1, 2026.

COTA Australia chief Patricia Sparrow welcomed the ”long-overdue reform.”

“For many older Australians, cash is a cornerstone of financial independence, not just a payment tool,” Ms Sparrow said.

“There is a myriad of very valid reasons why people need to and prefer to pay with cash, including privacy and security concerns.

“As it has become harder and harder to pay with cash over the years, we’ve seen too many people left with no option to pay for goods that doesn’t see them hit them with additional charges.

“Cash is legal tender and the changes government is proposing to introduce will ensure that people are able to continue to be able to use it.

“No one is against changes in technology, but as things progress we need to ensure no one is left behind. That’s as true with the cash and it is with the phasing out of cheques.

"This should be done with our most vulnerable in mind, ensuring that as cheques are phased out, we find solutions for all, including telephone banking for those who aren’t out and about in the community or online. This is key to ensuring that no one falls through the cracks.”

The government has also released its Cheques Transition Plan, which will see the phasing out of cheques completely by September 2029.

“The usage of cheques has declined by 90 per cent in the last ten years and many banks and financial institutions are ending cheque issuance for new customers,“ ministers Chalmers and Jones said.

“The Albanese government continues to make progress towards modern, world‑class and efficient payments systems that are safe, trusted and accessible as part of our Payments Strategic Plan.

“We are cracking down on excessive surcharging, expanding the RBA’s powers to regulate new payments technologies, supporting an industry‑led transition away from the Bulk Electronic Clearing System and have committed over $180 million since being elected to tackle scam activity across the economy."